The Cyprus Settlements and Prospects

1:00 P.M. EDT

SENIOR STATE DEPARTMENT OFFICIAL: Okay. First of all, I'll ask your indulgence because, as some of you know already, I got a cold in Switzerland, and I haven't been able to get over it. And I've been talking an awful lot for the last several days, and that just makes it worse and worse. So, excuse me, but that's the way it goes.

I think that a response to a question has, probably by now, come out over at the State Department in the wake of President Papadopoulos' speech last night. And I don't know if you've gotten that yet, but I could start off with that. And then I think the most useful -- I mean, we know one another pretty well here, and we've been doing this for a long time -- so I think probably the most useful thing, if you do already have that, is for me just to respond to your questions.

QUESTION: Did it make you cry?

SENIOR STATE DEPARTMENT OFFICIAL: Pardon?

QUESTION: Did it make you cry, too?

SENIOR STATE DEPARTMENT OFFICIAL: I would not say that making me cry was my response to the speech. It was quite different than that, but – yeah.

QUESTION: What does Turkey have to look forward, as yesterday said that they will oppose Turkish ambition to enter EU? So if this goes through, let's say, both sides say yes, what does Turkey have look forward in terms of getting a date from the EU to enter to the EU?

SENIOR STATE DEPARTMENT OFFICIAL: Well, if both sides say yes, the United Cyprus Republic enters the EU, of course, it enters the EU with certain characteristics; one of which is that it's going to support Turkey's accession to the EU. That's part of the whole Annan Plan. I think, more broadly of the evaluation, as nearly as I can tell, of certainly the commission and the person who is going to be writing the report, there is a positive decision to begin accession negotiations in December of 2004, as well as the vast majority of the member states of the European Union is -- the evaluation is now tricky, has done everything possible to get a Cyprus settlement.

It [Turkey] still has to demonstrate that it fully meets Copenhagen political criteria since for a positive decision to be taken, but it has done everything possible to get a Cyprus settlement. Indeed, I think Commissioner Verheugen has gone farther. This was last Friday; he made some statements about, in particular, in the wake of what went on in Switzerland, whether or not there's a yes on both sides in the referenda. No one, and no one in the European Union, and no member state can let, say, a "no" vote on the lone Greek Cypriots stand in the way of a positive decision on opening such negotiations with Turkey.

So on the specific question of a positive decision on Turkey, I think we're back to the point where it -- obviously, Turkey will have to fully meet Copenhagen political criteria, which, of course, it's been doing in every evaluation of the commission. It has been, it continues to do so, and you still look at implementation and so on, but clearly, though, the vast weight of opinion is that Turkey will do so. And this other problem, the Cyprus problem, if it turns out badly, that is, a "no" vote, that should not interfere with a positive decision on accession.

Since we're on background, let me just say one other thing about that. And it's the experience that I think Turkey and the EU have had together in this process, and you really saw it in Switzerland. One of the key things that had to be solved in Switzerland was this question of primary law and whether or not there could be permanent derogations and so on and so forth, which was a very important point, a very important point for Turkey. It wanted to be in a position of being able to be confident that if a settlement was reached in Cyprus, it would not be overturned through later judicial actions in Europe. And that was reason for the concern, perfectly valid concern.

But it came up against what was possible to do in terms of EU law and treaties, which was -- I mean, timing -- it was not possible to just come out with a decision that everything would be put in primary law. And the experience in Switzerland was that Turkey negotiated very well and very effectively to reach a solution to this problem which was satisfactory to Turkey, also satisfactory to the EU, and it did so in a way that those involved from the EU side, I think, were very, very impressed -- I guess the best way to put it would be the maturity with which Turkey did this. I mean, it behaved, and I mean this in a very positive sense, better than many current EU member states, behave in kind of meeting the needs of what it means to be an EU member state.

And you've got to make compromises and you've got to work these things out. So I think that whole experience -- this isn't something you put down and give evidence for, but my impressions of this whole experience, apart from reaching an agreement, ultimately, were very, very positive in terms of the evaluation of EU officials and commission officials about what it would be like with Turkey as a member state. I think the whole experience was a positive one.

QUESTION: Are you still optimistic for both sides saying yes to the referenda?

SENIOR STATE DEPARTMENT OFFICIAL: No.

QUESTION: And the secondly, could you give some detail about Secretary Powell's call to Turkey's official -- which sign it?

SENIOR STATE DEPARTMENT OFFICIAL: Which one? Ones? Sure. Well, what we've seen happening in recent days is a clear movement on the part of a lot of the political leadership, among the Greek Cypriots, among the Turkish Cypriots, and in Greece and Turkey towards endorsement of, if you will, of a "yes" vote in the referenda. And that, of course, has been very positive from our point of view.

We have also seen, however, a clearer and clearer position taken by Mr. Denktash, Rauf Denktash, in opposition to a "yes" vote in the referenda, and that, though disappointing, I can't say is particularly surprising.

We have now also seen a position taken by Mr. Papadopoulos, urging a "no" vote in the referenda, which I think, the way the Secretary General of the United Nations described it this morning in Geneva, was very disappointing, in particular, in the wake of everything that had gone on in terms of negotiations, the positions that he had been told over a long period of time. It was very disappointing to hear this, in particular, because of what it would mean if there were a "no" vote among the Greek Cypriots in the election.

So you have, in essence, a mixed picture. I'm trying to get to your question of, am I optimistic or not? It's a mixed picture now. I think if you look at the weight of where the endorsements for a “yes” vote will probably be before that vote, I think that most of the political weight in Greece, in Turkey, among Turkish Cypriots and among Greek Cypriots will be that there should be a "yes" vote.

We appear to be heading for a situation in which the two opponents of a "yes" vote are the two community leaders who have, of course, not been able to reach an agreement on a settlement on the Cyprus issue, lo, these many months and years.

So I suppose, if anything, what we've gotten is a vindication for the rationale of having this decision be put to the people of Cyprus for a decision, given the inability of the two community leaders to reach an agreement, and given, now, their apparent decision to advocate that the people of Cyprus also not come to an agreement.

I guess, to get to your question of, am I optimistic? It remains our view -- I think it's also the view of the United Nations; I'm sure it's also the view of the European Union -- that this settlement plan is fair and balanced, it meets the core interests of all Cypriots, and represents -- I think, the Secretary General always uses the term "unique" opportunity for a settlement of the Cyprus question. And "unique" means singular or only. I don't think any of us see any real opportunity for any time in the near future, if this plan is defeated, for another settlement to come about.

I think when all of this is examined by the voters in the referendum, both Turkish Cypriots and Greek Cypriots, when they really are completely clear about what the good parts of the plan are; what the bad parts are; how it affects them personally; when they honestly evaluate the recommendations they are receiving from political leadership, which, I say, will be varied, and they will have to make a choice about which recommendations they're going to follow; and when they honestly evaluate what is really being offered here: A settlement of the Cyprus problem, which, literally the entire international community, and a large part of the Greek Cypriot and Turkish Cypriot political leadership views as not an ideal settlement, but one that they can live with; and realize what the consequences are of a "no" vote, which is no settlement, with all that that implies, for any time in the reasonable future.

I guess I'm optimistic because I believe in the rationality of people who vote in a democracy that the answer will be, both among Turkish Cypriots and Greek Cypriots, "yes."

QUESTION: I want, too, Powell's latest --

SENIOR STATE DEPARTMENT OFFICIAL: Oh. Secretary Powell, again, you asked about the call. Secretary Powell has made a lot of phone calls. He's been very active. Are you talking about --

QUESTION: Yesterday's especially.

SENIOR STATE DEPARTMENT OFFICIAL: Let me see. I'm trying to think of which calls he made yesterday. He talked to the Greek Foreign Minister and the Turkish Foreign Minister yesterday.

QUESTION: And he act like (inaudible)? Maybe --

SENIOR STATE DEPARTMENT OFFICIAL: He actually was making some calls today. I don't know what has taken place, yet. But the calls to the Greek and the Turkish Foreign Ministers were yesterday.

They were basically calls in support of the settlement. And they involved different sorts of elements of that with the Greek Foreign Minister, then with the Turkish Foreign Minister. But they took place on the same day that Greece, Turkey and the United Kingdom had all given the necessary written assurances to the Secretary General about support for the outcome if it passes the referendum.

So they were really, in that vein, that this was very good that it happened, we're on schedule for getting a settlement, along the terms of the New York February 13th agreement, and there were a couple of other areas which needed attention. These are what the areas are from our view, and they discussed that.

So that I'd characterized them -- in both instances, though the topics were a little bit different -- obviously as in support of the settlement.

Yeah.

QUESTION: Since it's basically as -- where we are right now, and the problem is with the Greek Cypriot side, it seems to me --

SENIOR STATE DEPARTMENT OFFICIAL: Or some on the Greek Cypriots side.

QUESTION: Yeah. I want to ask you, though, some clarifications because there are other things on the air. First of all, it seems that Papadopoulos claims with his message yesterday that this is not the last opportunity. He left open the possibility that, "Don't listen to that. We have many opportunities in the future." There is also an idea that came out from some UN officials and some European officials from behind the scenes that there is a possibility for a second referendum in six months.

If you want to react to this --

SENIOR STATE DEPARTMENT OFFICIAL: You want me to do those two before you go on to the next one?

QUESTION: Yeah.

SENIOR STATE DEPARTMENT OFFICIAL: Or otherwise, I'll have to start taking notes.

QUESTION: Okay, and I have a follow-up.

SENIOR STATE DEPARTMENT OFFICIAL: Okay, well, let me just do those two.

On the question of, is there another opportunity, I think the Secretary General of the United Nations has made it very clear -- he uses the term "unique" -- that he sees this as the opportunity for a settlement. He does not see another. That's: The Secretary General of the United Nations, with the full endorsement of the Security Council of the United Nations, does not see another opportunity.

QUESTION: Because you mentioned the Security Council -- sorry that I am interrupting -- means that this is the U.S. position also?

SENIOR STATE DEPARTMENT OFFICIAL: Yes. Now, we certainly don't see another opportunity in any realistic timeframe.

The European Commission and elements of the European Union, that is, other member-states, have made very clear that they don't see any alternative opportunity in any reasonable time frame. And, you know, you can go back to public statements by Verheugen over the last couple days.

So if you have the UN, or the organization of the Secretary General, who has been charged with this for many, many decades, specifically as the mandate for his Good Offices Mission for a settlement saying he doesn't see another opportunity; you have the EU saying they don't see another opportunity; I think it would be incumbent on anyone who believed there was another opportunity to make clear what that opportunity is because it's clearly not one which is identifiable by any of the organizations that have been most intimately involved in this and that would be absolutely essential to have any other opportunity created.

I think that's a long answer to -- we don't see any opportunities here. The other point --

QUESTION: Another referendum in six months?

SENIOR STATE DEPARTMENT OFFICIAL: There were -- I know there was a report and I think it was based on some interview that Didier Pfirter gave, I think it was, which was then, when this report came out I think there were some public statements made by DeSoto when he landed in Larnaca and so on and so forth, there is no second referendum planned; this is it. So I think that, that whole thing has been put to rest by the organization best in a position to do it. So I think the answer is no there.

Okay, but you had a follow-up, so it's -- so I don't have to take notes.

QUESTION: Two things: One thing, the situation in Greece. Yesterday, we had before the Papadopoulos message the decision by George Papandreou to support a very hearty "yes" on the referendum, but at the same time you see that the government, the new government in Greece does not want, for some reason, to come out and take a clear position.

And the Prime Minister follow the same attitudes in Switzerland. He was on the sides, in a way, of the negotiations by saying that we are here to support the Greek Cypriot community. Your reaction to that, and if you -- and also, if you see that as helpful thing in a very crucial time?

The information is that probably the Prime Minister will take a position next Thursday, after the council of the political leaders under the auspices of the President of the Republic in Greece, and we don't have much time to change the public feeling in the Greek Cypriot side since the polls yesterday said that 62 percent is for "no" right now.

So your reaction to that?

SENIOR STATE DEPARTMENT OFFICIAL: Yeah, well, your understanding is the same as ours, that this is something which is being managed within the particular kind of mechanism, which is this, in essence, council meeting, and that the natural position will be taken at that council meeting, and then we'll know what it is.

I'd have to say in addition to that, though, there have been several very prominent voices in New Democracy who have already expressed themselves in favor of a "yes" vote on the part of Greek Cypriots in the referenda.

You've mentioned the former Foreign Minister's position in this and now Chairman (inaudible)'s position in this regard. I think there was another statement by former Prime Minister Simitis along these lines in the last --

QUESTION: Certainly, there was a --

SENIOR STATE DEPARTMENT OFFICIAL: -- a couple of --

QUESTION: -- statement and an op-ed article that is that --

SENIOR STATE DEPARTMENT OFFICIAL: Yeah, okay.

QUESTION: -- worked for the "yes."

SENIOR STATE DEPARTMENT OFFICIAL: Yeah, exactly. So I guess our evaluation is that the Government of Greece has chosen a political -- a particular mechanism with which to take a decision and make its position known. It's on the schedule, which you just discussed, but that, of course, all of the signs that we see are favorable in terms of that position being in favor of a "yes" in the referendum.

QUESTION: I want to insist on that. I am sorry that's taking this more time. I'm the only Greek I see here, so -- (laughter.)

I'm insisting on that because the whole thing of this council under the President of the Republic is a futile thing. Since you have the main oppositional leader for "yes," various political personalities in Greece for "yes" --

QUESTION: Including Mitsotakis.

QUESTION: Including Mitsotakis, with the exception of the former Prime Minister George (inaudible) of (inaudible) that came out against yesterday with a very hard statement.

I see that as an indication to -- and strengthening of the "no" in Cyprus when you have the official Greek Government, who won a clear mandate a few weeks ago, a strong mandate, and you have a Prime Minister that seems to fear something or fearing the reaction of Papadopoulos, I don't know what, it seems to me that gives strength to the public feeling in Cyprus on the Greek Cypriot side that something is wrong with the plan.

So do you plan to talk to the Greek Government behind the scenes? And we can go off the record here, if anyone agrees. But it seems to me that this is a serious problem. I get the feeling from Greece and from the Greek part of Cyprus that it's not good.

SENIOR STATE DEPARTMENT OFFICIAL: Let's go even off background. […]

QUESTION: (Inaudible.)

SENIOR STATE DEPARTMENT OFFICIAL: (Inaudible.)

QUESTION: And the talk with (inaudible) was part of this, right?

SENIOR STATE DEPARTMENT OFFICIAL: Certainly.

QUESTION: Or mainly aimed at this?

SENIOR STATE DEPARTMENT OFFICIAL: Well, he was saying that all kinds of aspects, which make a positive outcome of the referendum more likely, of which there are many. I mean, you've got a donors conference going on; we're going to have things going on in the Security Council. I mean, there are all kinds of elements to it. But this is clearly an element. The degree to which the united political leadership -- whether it's Greece, Turkey, Turkish Cypriots, Greek Cypriots -- encourage a "yes" vote in the referendum, the better, from our --

QUESTION: And the earlier the better.

SENIOR STATE DEPARTMENT OFFICIAL: And the earlier the better, and the earlier the better. Yeah.

QUESTION: I was a few minutes late, so if you addressed this at the beginning, I apologize. First, a very quick question. There are some advisors to Mr. Denktash, Rauf Denktash, who seem to be suggesting today that if Mr. Denktash goes to Mr. Papadopoulos, and they both go to the Security Council, or Secretary General, and ask for a postponement of the referendum, that that could materialize. Do you think --

SENIOR STATE DEPARTMENT OFFICIAL: I think they'll get a no.

QUESTION: -- would be possible --

SENIOR STATE DEPARTMENT OFFICIAL: No, I do not. Absolutely not. And I think -- I think the two people could never reach agreement who have now both publicly come out and said they do not support "yes" votes in the referendum, thereby associating themselves together on a particular stance on the future of this settlement plan, going and asking for a postponement of putting this to the Cypriot people to decide, I do not believe would be viewed favorably by the Secretary General. (Laughter.)

QUESTION: Thank you. And my second question was --

SENIOR STATE DEPARTMENT OFFICIAL: I don't want to speak for him, but that is my belief. It would not be seen very favorably.

QUESTION: The other day we asked you about what the U.S. could do, about some specific steps that U.S. would take in the remaining time, and you really indulged us with a very, I think, long and detailed answer. But you mentioned the donors conference, which is a week from now. What's actually happening at the Security Council? Could you just give us some background on that? You know, when there will be a decision about this establishment of the (inaudible), how that's going to proceed?

And you also, the other day, emphasized the importance of educating the society and, you know, letting them know why this is going to be good for the individuals too, because especially the Greek Cypriots at this point. What will be the concrete thing the U.S. will be doing? Are you going to be distributing, you know, pamphlets?

SENIOR STATE DEPARTMENT OFFICIAL: Yeah, okay, let me deal with all of those, just to give you the best information I have right now.

We are obviously taking the position: This is a decision for the Cypriot people. And we are trying to be as careful as we can to make it clear that we believe they will make the right decision in the end, when they consider everything rationally. But it is ultimately their decision and, we don't prejudge it, we don't dispute it, and so on and so forth.
Because of that our efforts are going to be devoted to, as you say, this informational issue because there is a slanted view out there now about what is in the finalized plan.

When I heard President Papadopoulos' speech last night -- he talked about the lack of functionality and that financial things that hadn't been included; and I know what is in the plan and know that, literally, everything he advocated over the last eight months in these two years was in the finalized plan -- I conclude that there is a very slanted information base out there now. So this informational effort is very important. What are we, the United States, specifically doing to help in that regard? We are supporting the -- the whole UN team is now back on the island and they're available. You know, they are, of course, the experts on what is actually in the finalized plan and what is not. And so they are available. They're talking to people. They're trying to at least make sure that there is accurate information and relatively unbiased information out there.

The other thing is that we had this very good effort by PRIA, the Norwegian NGO. This is the green book and the interactive website, cyprusdecides.org, which was all based on Annan 3. We have been supporting an effort to update both that book, which of course is available in Turkish, Greek and English, as well as the interactive website so it now takes account of all of the changes in the finalized plan, of which there are many, like in particular in the property regime and things like that.

My most recent information is that [it] should all be done either today or tomorrow. So, to give you a specific answer, I think there will be a lot more balanced, objective analysis of information out there, both in written form and in electronic interactive form on cyprusdecides.org, available today or tomorrow.

The other two elements you mentioned, we've talked about the donors conference. I'm getting ready to go out there, obviously. We've done our preparations. We will be talking very explicitly about very substantial contributions from the United States. And I now know from my contacts with a lot of other sources. So I think by the 15th, there will be a very clear demonstration of the commitment of the international community to doing what is necessary in this particular case, in the financial area, to make sure that the settlement is carried out fully, paid for, on time and so on. And I think people are going to be very pleased in that regard with the results of what happens on the 15th.

The other specific question related to the Security Council. I am of the view that in order to make an informed decision in the referendum, Cypriots ought to be quite sure about what the security structures are and what will be in place, meaning the, among other things, the follow-on UN peacekeeping mission.

We had the meeting of the Security Council last Friday, or the informal brief from DeSoto, where he told the Security Council that the Secretary General would be reporting all of this to the Security Council in the not-too-distant future, and asking the Security Council for the necessary measures, or inviting -- I think the Secretary General has to invite the Security Council to take the necessary actions to execute the settlement.

Those actions are all contained in the Annan Plan, so if you need the details, you go to the Annan plan, go to the Annex, which is entitled, "Measures The Security Council Could Be Invited To Take," and there are basically three elements. One is an endorsement of the foundation agreement. The second is to put in place an arms embargo, as provided for in the agreement, binding on both importers and exporters. And the third is to mandate the follow-on force. And the details of that mandate are contained in that annex document, which was actually strengthened. So it's a strengthened mandate from what it was in Annan 3.

My understanding is that they're obviously working on this report and all that sort of thing. You know there was a whole plan of when certain actions had to be taking place out of the February 13th agreement, which is, as I say, on track, which today's issue of getting the written commitments from the three guarantor powers. And that's all been done and taken care of. And the next step is now this report and the action by the Security Council.

My most recent information is they expect this report to be forthcoming; the Secretary General expects this report to be forthcoming about the middle of next week. So when would the Security Council actually take action? We'll get the report and then we'll proceed apace, but it's all based on the Secretary General giving his report, and I think that's probably about the middle of next week. I can't be more specific on a date. It depends when we finish it, and as we found in Switzerland, just technically moving this stuff around the world -- and it's funny, in Switzerland, because we ended up with, what was it -- because there are 9,000 pages per copy of the Plan of Law, which ended up, for sufficient copies with Switzerland, we had to ship 57,000 pages of this stuff from Nicosia, where all the technical (inaudible) were in time to get to the signing ceremony. It's just technically difficult to move this stuff around. But I'd look for action next week, certainly the initial version of the report.

QUESTION: Thank you.

QUESTION: I would like to ask you a question about a possible negative scenario because we've been talking positives and negatives a lot, but what if only the Greek Cypriots make it to the EU at the end of May? Then what's going to be the U.S. take on the entire issue?

SENIOR STATE DEPARTMENT OFFICIAL: Well, we don't like to answer that question. We'd like to say we're going to do everything possible so that situation does not arise, which would be no settlement or no positive vote on both referenda.

But to be fair to you, if that were to come about as a result of a "no" vote on either side, it would be a "no" vote on a settlement which has basically been judged to be fair, balanced and the only possible settlement by the UN, meaning both the Secretary General as well as the Security Council, the EU, just about every other interested party that I can find, as well as by, I think, at the time it will have also been judged -- well, I know it will be judged to be that way by Turkey. And I hope that it will be judged to be that way by Greece by that time.

Obviously, a decision against it on the part of either community on the island would have consequences. And those consequences would depend, to some extent, on who -- I think the phrase I used on the island, for which I was accused of being threatening -- would be bearing the heavy historical burden of not taking this opportunity to solve the problem. I think it's obviously very hard to speculate about what all the consequences would be, but there would be consequences, obviously, in how Cyprus functions in the EU, if for no other reason because the acquis communitaire doesn't apply to a large part of the island, which has consequences for movement on the island, among other things.

There would obviously be consequences, Cyprus entering the EU, after the EU declaring itself very much in support of the settlement and with the Cyprus entering the EU, where the Cyprus would have rejected it, I can't predict in any detail what the consequences of that would be, but I know that the EU does have ways of dealing with member-states who it finds not particularly receptive to the ways that business needs to be done in the EU. So there would be consequences, I anticipate. That's obviously not for us to say, not being in the EU, but I'm saying that as an analytical matter.

Obviously, in the wake of the lack of a settlement, I think there are probably predictable consequences on the island. As I've mentioned, there would have to be some regime put in place which would deal with this very odd situation of being a member-state in the EU but the acquis not applying to part of the member-state, which is some precedent in the EU. But I think individual Cypriots will have to start thinking about what they want to do in this sort of a case. And the consequences of that -- there will be consequences -- I don't know what they'll be but I'm sure there are going to be consequences.

So, without spinning this out too much, I think the consequences of this situation would, although I am in no doubt myself that Cyprus will enter the EU one way or another on May 1st; entering without a settlement when settlement is available, judged to be fair and balanced by the UN, the EU and everyone else, clearly would have consequences.

QUESTION: (Inaudible.)

SENIOR STATE DEPARTMENT OFFICIAL: Pardon?

QUESTION: I mean, what (inaudible)?

SENIOR STATE DEPARTMENT OFFICIAL: Well, I'm not sure. No, I really can't. And I certainly won't for the EU. I mean, I've read about some of them that are being talked about in the EU.

QUESTION: For example, you think the embargoes (inaudible)?

SENIOR STATE DEPARTMENT OFFICIAL: I think that under those circumstances the EU, because it would be in a situation where all of Cyprus is in the EU but the acquis doesn't apply, I think the European Union would have responsibilities to Turkish Cypriots to assure that, especially if it were a decision by Greek Cypriots that there wasn't a settlement, and that the consequences of that were very bad for Turkish Cypriots -- they would not be entering the EU at the same time -- I think the EU would have great responsibilities to Turkish Cypriots. I don't know technically how they would meet those responsibilities, but they would have them. I think they recognize these responsibilities, and from everything I know about the EU, they are prepared to act on those responsibilities in that particular event.

QUESTION: One clarification to that, okay? I can go a little bit further. You spoke about the EU, the UN, all the parties, the interested parties that judged the plan as fair and balanced and what will happen possibly if we have a "no" vote from the Greek Cypriots.

My colleague asked about the (inaudible) recognition, the possibility. I want to ask you if you can say what is going to be the U.S. reaction on that, as a country?

SENIOR STATE DEPARTMENT OFFICIAL: On the specific question of recognition?

QUESTION: Yeah, if we have --

SENIOR STATE DEPARTMENT OFFICIAL: No, I can't say because we would evaluate everything in the wake of the situation at that point in time.

QUESTION: But my understanding is you are of the same mindset, that even the EU, everyone has responsibilities to the Turkish Cypriots if they say "yes" and the Greek Cypriots say "no."

SENIOR STATE DEPARTMENT OFFICIAL: I would say we are very much in that mindset.

QUESTION: You will take this (inaudible) of the United States against the Turkish Cypriots?

SENIOR STATE DEPARTMENT OFFICIAL: Against the Turkish Cypriots?

QUESTION: No, the --

SENIOR STATE DEPARTMENT OFFICIAL: No, it's quite the -- in favor of. We would be very mindful of who is responsible for the situation that had been created, under those circumstances.

QUESTION: So you will -- the United States will also react to the party responsible for the failure?

SENIOR STATE DEPARTMENT OFFICIAL: What we will be doing in that sort of a situation is doing what we can to assure that those who would suffer most from that sort of a decision not suffer any more than they had to. What that will specifically be, I'm not prepared to speculate on or to talk about. I'm just telling you I think word "mindset" is the right one here, that we will approach this in terms of the policies that we pursue, and we will pursue those policies in very strong cooperation with the EU, who will be the body most responsible for decisions here, but very much with a view to doing what we can to assure that those who would suffer most from that kind of an outcome suffer as little as possible, since it clearly would not be their fault. That would be our mindset and approach.

QUESTION: (Inaudible) Greek leaders, especially I -- you talk about the worst-case scenarios, so they are suppose to know how to suffer (inaudible). So they don't believe you or they don't see any possibility to suffer any, now what?

SENIOR STATE DEPARTMENT OFFICIAL: Well, I mean, it's hard to get in the minds of any individual Greek Cypriot leader, or Turkish Cypriot or anyone else. But to try to answer your question, I think that there are different evaluations going on now among political leaders -- Turkish Cypriot or Greek Cypriot, Turkish or Greek. And because of those different evaluations, they're coming up with different policies.

It's fairly clear to me that a lot of the Greek Cypriot political leadership is moving towards advocating a "yes" in the referendum. I think if that happens it is because they have made an evaluation about: What are the benefits of the settlement? What are the costs of not having a settlement, and so on and so forth? And they've come up with the conclusion that the best result would be a "yes" in the referendum.

If others, like President Papadopoulos, who has concluded that it would be best if there were a "no" vote in the referendum, he clearly has come up with a different calculation. And whether it's based on a lack of belief about what the benefits would be or the consequences would be, I can't say. I can speculate, but you can probably speculate as well as I can that judging by his speech, because he did not include in his speech any of the benefits which everyone else seems to see in the settlement plan, things like very large numbers of Greek Cypriots recovering their property and literally all Greek Cypriots recovering at least part of their property, which he did not mention, I take it he doesn't believe it or he discounts it or he's not interested in it. I don't know. But in his speech he did not discuss any of the benefits of the plan or having a settlement. He only discussed the negative.

So I assume his calculation is that there are so many negatives in the plan that they outweigh both the benefits in the plan, which he hasn't acknowledged, and outweigh what the potential negative consequences of no settlement at all are going to be.

QUESTION: Would you elaborate on the modalities of the principle of those who suffer most should then suffer as little as possible because it's not their faults?

SENIOR STATE DEPARTMENT OFFICIAL: Yeah. Well, I think, you know, the whole intent of the EU would have to be to move towards a situation in which the acquis communitaire could apply in their life. And that would mean do what you can to prepare things, which has all kinds of implications for the provision of funds, to improve infrastructure, to create the sorts of organizations and law in the north, which would be necessary for the acquis communitaire to apply ultimately -- I mean that sort of thing. I think there's a real --

QUESTION: Apply ultimately for?

SENIOR STATE DEPARTMENT OFFICIAL: The north.

I think the other thing that would have to be done is we do have a situation in which Turkey and the EU have a customs union, which is very complicated in terms of the economic relationships between the north and Turkey right now. I think in the wake of a negative decision that would have to be regularized in some way. I don't see a lot of options to regularize it except by changing the existing trade regime, if you can call it that, which exists with the north; that is, the embargo, or the so-called embargo.

But at any rate, I'm speculating here, but I'm trying to give you a feel for the sorts of things which the EU would have do under these circumstances.

QUESTION: In other words they would have to establish some kind of independent relations with the north, even if it doesn't mean recognition?

SENIOR STATE DEPARTMENT OFFICIAL: Now, I don't know if independent relations is quite the right term. I think it's more they would have to find ways of preparing the north for ultimate application of the acquis communitaire in the north. Because remember, the north would be a member. The whole island is a member of the EU as of May 1st. That's the legal situation from the EU's point of view. What is different is that the acquis communitaire is suspended in the north, so that's the problem, which ultimately has to be overcome. So it's not a recognition issue. It's finding ways to overcome the suspension of the acquis communitaire on the north.

QUESTION: It's the first step, in a way.

SENIOR STATE DEPARTMENT OFFICIAL: Pardon?

QUESTION: It's the first step -- something like that.

SENIOR STATE DEPARTMENT OFFICIAL: Yeah. But, I mean, you can translate it into real actions. I mean, you know, how do you go about bringing up all of the infrastructure in the north (inaudible), to take an example? I mean, the EU has all kind of environmental standards which have to be applied and things like that.

QUESTION: And from your standpoint -- from the U.S. standpoint, you would act in parallel with the EU?

SENIOR STATE DEPARTMENT OFFICIAL: We are going to be operating in great cooperation with the EU, yeah.

QUESTION: But, sir, you are not for -- I believe you are not forgetting at the time the Cyprus is a member of the EU.

SENIOR STATE DEPARTMENT OFFICIAL: Right.

QUESTION: They have the veto there power.

SENIOR STATE DEPARTMENT OFFICIAL: Well, they have veto power only on certain decisions. Many decisions in the EU are based on qualified majority voting. Only on certain decisions.

We're talking about an awful lot of decisions by the EU which are based on qualified majority voting and in which you, if you have a total veto -- or a total "no" vote from Greece and Cyprus -- it won't matter. The EU can move ahead. You have to differentiate between the decisions for which unanimity are required and those which require qualified majority voting. Most of the things we're talking about -- an issue like recognition would require unanimity. It's not going to happen.

QUESTION: By the EU, but not by individual countries.

SENIOR STATE DEPARTMENT OFFICIAL: Not by individual countries. Not by individuals, but by the EU as a whole. But the things that we're talking about here, whether or not you provide project financing to bring X power plant up to the environmental standards of the EU does not require unanimity. I mean, I know that this is awful. Whenever we talk about the EU we get into these complex --

QUESTION: And apparently, apparently while doing this to upgrade that power plants, the EU authorities will be in touch with local authorities, not with Cyprus authorities in the south, because they have already rejected (inaudible) from the north.

SENIOR STATE DEPARTMENT OFFICIAL: Yeah. Well, they're, of course, in touch with local authorities now in all the planning of this pre-accession assistance and everything else has required that. How they would do that under the circumstances we're hypothesizing on, I don't know yet. I think they would make every effort to find a way and I think you would find a situation in which you would have at least 23 member-states of the EU wanting to do one thing and -- your phrase, not mine -- and at most, two, and I'm not even sure that you would have two, taking a different view

QUESTION: But whatever you do in this case, you help the Turkish side. Whatever you do, there's this main point we were just going to discuss. What about the (inaudible) between the two communities? I mean, his plan was to unite the two people and looking at what Papadopoulos said yesterday, literally, he said he called for a "no" vote.

But what struck me most about what he said is that, you know, not a journalist, as an individual, what struck me most was, he said this plan is not to unite us but to divide us. And this is not his personal belief. I don't believe it. He represents other people. And, literally, what he said, will affect not only the Greek side, but also the Turkish side because on the other hand, he said the Turks have lots of benefits. He didn't mention any benefits for the Greek side but he said some of the Turkish, okay, okay, oh, it seems like we've got more benefits and they would say yes. But some of them may be the young generation, maybe, will think that way. But the older generation will think that oh, they don't want a united Cyprus. They kind of have not get rid of their old philosophies. What they want is they want to be in the EU and they want us to, you know, fight us altogether and so (inaudible) shaken.

SENIOR STATE DEPARTMENT OFFICIAL: I certainly don't disagree with that analysis, and the only thing that I can say is that I hope people will listen to some of the other political leadership among the Greek Cypriots as well, and not take this expression of view, which we heard yesterday, as the definitive expression of view, by all of the political leadership in the south or of Greek Cypriots.

QUESTION: Yeah, but what -- my last question is --

SENIOR STATE DEPARTMENT OFFICIAL: But that it has had this effect --

QUESTION: You have been working, on this -- the EU, U.S. --

SENIOR STATE DEPARTMENT OFFICIAL: -- is, of course, clear.

QUESTION: -- everybody is working on this very hard for a long time. And how come you reached to this point, you know?

SENIOR STATE DEPARTMENT OFFICIAL: How come we came to which point?

QUESTION: Yeah, because there is no trust built in, you know? Nobody trusts each other.

SENIOR STATE DEPARTMENT OFFICIAL: I guess the fair way is the history of the island.

QUESTION: If "yes" vote comes from the both sides, still there is no trust in this.

SENIOR STATE DEPARTMENT OFFICIAL: Well, if a "yes" vote comes from both sides, I think in some way that's an indication of trust.

QUESTION: Yeah, maybe.

SENIOR STATE DEPARTMENT OFFICIAL: And is it complete? No. But I would read it a different way. A "yes" vote would be very much an indication that we have moved a little forward in terms of trust in both communities.

QUESTION: Yes, maybe. But this is a great negative towards, or maybe you forgot to trust-building things while you were working on this plan, (inaudible).

SENIOR STATE DEPARTMENT OFFICIAL: Well, the United States, I think more than any other country, has been working -- I started working on this in 1978, when we started doing all of our bi-communal processes, we've been doing it since then, and trying to do exactly what you're suggesting.

Have we been completely successful? Obviously not. Have we had some success? I think we have. I think the fact that starting last April, when people were able to travel and that you have had 3.5 million crossings or more now, with only two insignificant ethnically inducted incidents tells you an awful lot about what might have been accomplished with a sense of trust.

Is the statement of President Papadopoulos that he made yesterday an indication that he may not have been the beneficiary of this building of trust over the decades? I think you could certainly take it that way. And I would understand very much how a Turkish-Cypriot could take it that way.

Should it be taken as the view of all of the political leadership among the Greek Cypriots? I do not believe it should be. Should it be taken as the view of Greek Cypriots as a whole? I do not believe it should it.

MODERATOR: I think with that one we have to cut it off. I'm sorry.